Recovery to resilience: The next phase for Australia’s inbound tourism industry
It is increasingly clear the challenge ahead is changing, writes ATEC's Peter Shelley.
For the past few years, Australia’s tourism industry has been focused on rebuilding; restoring international demand, reconnecting with global markets and recovering from one of the most disruptive periods in our history.
But as we move through 2026, it is increasingly clear the challenge ahead is changing. The focus can no longer be on recovery alone; it must now be on resilience.
Recent ATEC member feedback confirms international interest in Australia remains strong across our major source markets, including China, India, Southeast Asia, the United Kingdom, Europe and the United States. But global events have reinforced an important lesson—demand alone is not enough. Traveller confidence remains highly sensitive to uncertainty, and converting strong enquiry levels into confirmed bookings can quickly become more challenging when global conditions shift.
Recent ABS data reflects this fragility. Australia returned to almost 100 percent of pre-pandemic inbound levels in February, yet by April, monthly arrival figures had fallen back to just under 90 percent of April 2019 levels. While annual inbound performance remains close to full recovery overall, the recent shift suggests momentum may have softened and that international tourism remains vulnerable to changing global conditions.
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Australia is also operating in an increasingly competitive global environment. We are not simply competing against neighbouring destinations, but against every country investing aggressively in tourism growth, aviation access and visitor affordability.
While some Asian markets are showing encouraging year-on-year growth, many remain below pre-pandemic levels. China, for example, continues to sit well below 2019 arrival numbers despite recent improvement, reinforcing the reality that recovery across our inbound markets remains uneven and cannot be assumed complete.
ATEC is increasingly concerned by the growing disconnect between Australia’s tourism ambitions and the policy settings currently shaping our industry. The recent Federal Budget delivered cuts to Tourism Australia funding while simultaneously increasing visitor costs through a higher Passenger Movement Charge at precisely the moment Australia is facing stronger global competition and early signs of softening demand.
Australia cannot afford to lose market share internationally and the response should be greater investment in global competitiveness, not policy decisions that make Australia more expensive to sell and harder to access.
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For the thousands of small and medium-sized tourism export businesses that underpin Australia’s visitor economy, these pressures are compounded by ongoing frustrations with the Export Market Development Grant program. Application complexity, unrealistic funding thresholds and continued uncertainty around grant availability are creating barriers for the very businesses government should be backing to grow international demand.
Australia remains one of the world’s most desirable destinations, but demand alone will not secure our future success. The recovery phase may be behind us, but the work required to protect Australia’s market position and ensure we remain globally competitive has never been more important.
